Controversial Guidance from EEOC Complicates Use of Criminal Background Reports

On April 25, 2012, the Equal Employment Opportunity Commission (EEOC) updated its Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII. There has long been a debate about the consideration of criminal history in the hiring process. http://nelp.3cdn.net/e9231d3aee1d058c9e_55im6wopc.pdf However, this is the first guidance that the EEOC has provided on this topic in 20 years. The guidance does however reflect the EEOC’s long-held position that employers’ reliance on arrest and conviction records may have a disparate impact on individuals because of their race or national origin. 

It is important to remember that the EEOC is not a rule-making body.  However, the EEOC can bring claims for what it considers to be conduct that violates Title VII.  The guidelines provide a “prosecutors” view of what conduct may violate Title VII.  It will be the courts that ultimately decide the issue.

The guidelines focus on two employment background check situations that it believes cause concern:

1.     Disparate treatment.  A more obvious concern.  This occurs when employers treat criminal history differently for different applicants/employees, based on their race or national origin.

2.     Disparate impact. A trickier scenario.  This is alleged to occur when an employer’s neutral background check policy or practice disproportionately impacts a protected class of individuals, unless the policy is job-related and consistent with business necessity.

It is the disparate impact theory that complicates the criminal background screening process.  For a disparate impact claim, the EEOC first must identify the policy or practice causing the disparate impact and then confirm that there is a disparate impact.  The focus will be on the affirmative defense that the policy or practice is job-related and consistent with business necessity.  The EEOC identifies targeted screening to be permissible where the policy takes into account: (1) the nature and gravity of the offense or conduct; (2) the time that has passed since the offense, conduct, and/or completion of the sentence; and (3) the nature of the job held or sought.

It must be remembered that background screening is not an unjust practice.  Private businesses should be free to hire the best, qualified individual that meets its individual preferences, so long they do not discriminate based on race, sex and other protected classes.  Indeed, background checks are done to protect (a) the public from the consequences of the wrong person in the wrong job; (b) employees from the consequences of hiring the wrong person; (c) the company’s assets; and (d) the company’s reputation.  Failure to protect against the consequences of the wrong person in the wrong job cost employers and society in many ways.  Lives can be lost or individuals hurt if this information is not considered.

In light of these facts it is interesting that the EEOC blankly takes the position that an arrest record is never job-related and consistent with business necessity because an arrest does not establish that criminal conduct has occurred. While certainly true as to an individual’s constitutionally protected right you are innocent until proven guilty, it is a far stretch to say that a private employer is engaging in discriminatory conduct because it relies on an arrest to make an employment decision.  For example, the employer may want to avoid the publicity and business disruption caused by the arrest and trial, or may have a legitimate concern that the pending charge may distract the employee and  prevent her from properly doing her job (irrespective of race).

A prominent issue with respect to background reports relates to accuracy.  The Fair Credit Reporting Act requires reasonable procedures to assure maximum possible accuracy.  One issue for matching a criminal record to the applicant relates to the lack of identifying information provided by the courts as to the criminal record.  For example, privacy considerations have resulted in courts no longer providing the social security number of the person associated with the record.  As an SSN is one of the best ways to match a record, the elimination of this information has made it more difficult to assure accuracy.  The guidelines provide one suggestion that improves accuracy and another that impedes accuracy.

I have argued on behalf of consumer reporting agency that the employer plays a role in the accuracy reasonable procedures, namely by making sure that there has been a proper match.  The EEOC suggestion that the employer’s policy should provide “an opportunity for an individualized assessment” confirms this point. The Guidance provides several factors for consideration during the individualized assessment, including a showing that the individual was incorrectly identified in the background check.

However, the “ban the box” suggestion impedes accuracy. With ban the box, the EEOC suggests that employers remove criminal history inquiries from the employment application and not make such inquiries until the applicant is being interviewed or even later in the process.  This suggested process creates an accuracy problem.  One of the best ways to confirm you have a good match is by comparing the information provided in the application with the information included in the screening report.

While employers will have to review their policies in light of the EEOC’s guidelines, it will be interesting to see how industry reaction will affect the content of criminal background reports and more importantly the accuracy of the data relied on to make employment decisions.


Posted by Ron Raether
Business Litigation
May 2, 2012